Are We Nearly There Yet?

A major concession by the UK to the Withdrawal Agreement has enabled it to formally leave the EU at the end of next month but the process will not be complete. Some concessions by the EU on the non-binding Political Agreement give room for negotiation on the terms of any trade deal. Both documents are examined with reference to others’ detailed commentaries.

In late 2018 a spineless British Government accepted a Withdrawal Agreement (WA1) that failed to “Take Back Control” of very much at all from the EU and was denied three times by Parliament. A year later the new Government has stiffened the sinews, summoned up a few changes and passed it (WA2) into legislation. Will it do?

Boris binsWe won’t attempt the sort of detailed analysis that we did on Theresa May’s WA (see for example [1]) because better legal minds than ours have already done the necessary work. The UK Parliament offers a commentary on the Boris WA and a link to the document itself [2]. For the analysis we can recommend the review and detailed commentary provided for BrexitCentral by Dr. Lee Rotherham [3] & [4].

The revised Political Declaration (PD2) and Boris Johnson’s WA are linked here [5] & [6]. To complete the set, the original Political Declaration (PD1) and May WA are linked at [7] & [8].

In its online commentary the UK Parliament offers this: “The main differences are in the Protocol on Ireland/Northern Ireland or the ‘backstop’ as it is commonly known. It contains very different arrangements, the UK will no longer be in a single customs territory or union with the EU. The UK will no longer be legally bound to continue with level playing field commitments at the end of the transition period. …Northern Ireland will remain mostly aligned to the EU’s regulations for goods. Four years after the end of the transition period Northern Ireland’s democratic institutions will vote on whether they wish to continue the arrangements in the Protocol.”

This removes major obstacles from the original WA but leaves Northern Ireland with a different status from the rest of the UK and extends that status beyond the end of the transition period. Some UK Government proposals “were rejected by the EU [which] reiterated its position that the border between Ireland and Northern Ireland should remain open, without infrastructure. It also expressed concern that the Government’s proposals would risk the integrity of the EU’s Single Market and its legal order.”

We note that “should remain open” remains rather vague and “integrity of the EU’s Single Market and its legal order” depends on the EU’s definition of ‘integrity’ (which will surely serve only their interests). The reference to its “legal order” reminds us that continued vigilance will be needed to make sure that in any future agreement the UK will remain independent of the self-interested edicts issued by the CJEU.

In comparing the new and original WAs, the Parliament states that, “Only two Articles in the main Withdrawal Agreement have changed from the November 2018 text, and the changes are minor…This means that the rest of the Agreement remains the same.” There were many problems with the original WA so sameness is not a recommendation. The need for continued vigilance is reinforced by references to the ‘level playing field provisions’, which were “in the areas of taxation, environmental protection, labour standards, state aid and competition. These have now been replaced by less specific and non-binding commitments in the Political Declaration to uphold such principles in any future trade agreement between the EU and the UK.” The main purpose of such provisions, which will no doubt be repeated in the revised ‘negotiating mandate’, is to protect the EU from commercial competition on its doorstep (more on this below).

In his online commentary on the revised Political Declaration [3] Dr. Rotherham has this to say, “[T]he future lies in the revamped Withdrawal Agreement and Political Declaration…[T]he Boris Deal is a material advance on the May precursor”. This is because parts of the original text have been improved and the ambiguity about the ending of the transition has been removed; the UK Government’s declared intention is not to extend the transition period beyond the end of 2020.

He concludes, “I’m optimistic. Experience on EU matters simply teaches us to be alert.” A sound balance.

With those generalities summarised, we now offer a few selections from Dr. Rotherham’s more detailed analysis [4].

Confirming the need to be alert, he writes that, “the attempt to mitigate the pledge to regulatory alignment…is only a partial improvement and leaves several areas of concern. There remains an inherent threat…to the opportunity for future deregulation and regulatory divergence…”

This refers to the revised Political Declaration [5], which has this, “…the Parties [EU and UK] envisage comprehensive arrangements that will create a free trade area, combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition…”. (para. 21) and this, “…the Parties should uphold the common high standards applicable in the Union and the United Kingdom at the end of the transition period in the areas of state aid, competition…and relevant tax matters.” (para. 77) This reminds us that the EU is afraid of competition and wants to limit it, voluntarily if possible and by statute otherwise. We expect to read often, during the FTA ‘negotiations’ about “deep regulatory and customs cooperation” and “a level playing field for open and fair competition”. It will be the EU that mandates what is meant by regulations (i.e. theirs), standards and level playing field. We can be sure that they intend to restrict the UK’s scope to set its own tax regime, for example, which may bring unfair competition unless taxes conform to EU standards.

Dr. Rotherham picks up another point that many commentators have missed: “At the point of Brexit, the 2011 European Union Act – which required a referendum to take place if the UK signed up to further integration – falls. This removes a domestic safeguard against re-integration that might take place under a future UK Government.”

The Political Declaration is a statement of intent and as such reveals the intentions of the EU. The UK government should remain alert to their intention to integrate the UK as far as possible into its commercial regime; this intention will not go away and the EU will want to continue to “review the future relationship” (para.121) after it is established in law (assuming that a FTA is indeed agreed in due course).

He picks up the ‘assuming’ thus, “… a transition to a Strongly Mitigated No Deal end state remains on the table as a potential end state, assuming talks lead nowhere. The difference now is that ‘No Deal’ will come with a six month notice period, which by definition will redirect negotiators to aim for a less ambitious trade settlement, thereby avoiding the No Deal scenario anyway. The text induces a lowering of expectations if they are not met, and buys time for a form of deal to be delivered…”. Emphasising that the future relationship will remain political (i.e. contentiously competitive) he quotes the Latin recommendation that if you want peace prepare for war. Once outside the EU the UK will never be able to relax.

Leaving EUSo, the UK seems set to leave the EU a year from now, probably with a deal of some sort, whether an FTA or a set of mitigating arrangements to avoid the steepest of (cliff) edges. There is a provision to extend the transition for a couple more years; despite Boris having passed a bill to deny that possibility he could pass another to repeal it. Meanwhile everything stays the same, in principle. We can’t expect to win many grants, contracts or whatever goodies the EU funds but will continue paying our membership dues and apply the Union’s laws and rules, without any say, for a year at least. The divorce payment will be a bit lower because we have paid some of it while things have dragged on (it’s too late now to argue that this settlement was unfair). Details about Northern Ireland, Gibraltar or our military base in Cyprus may be important but not in the minds of most GB citizens.

We will leave readers to follow their own interests, allowing Dr. Rotherham the last word, for now:

“In summary, we conclude that although a number of critical fault lines from the May original have not been fixed, overall the Bo Deal is better than a bad deal – but this comes with major caveats depending on there being the intent to deliver on its promise. If the modified Withdrawal Agreement and Political Declaration are both passed, the job is still only half done, and it may yet go badly wrong.”
[1] Draft Withdrawal Agreement: a Fatal Flaw

[2] https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8713#fullreport

[3] https://brexitcentral.com/boriss-brexit-deal-is-on-the-way-to-being-passed-but-there-are-a-few-areas-where-we-need-to-keep-vigilant/

[4] http://www.theredcell.co.uk/uploads/9/6/4/0/96409902/the_boris_deal.pdf

[5] Revised PD

[6] Revised WA

[7] Original PD

[8] Original WA


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